Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Govt’s underlying budget deficit better than forecast

Government’s underlying budget deficit better than forecast

Jan. 25 (BusinessDesk) – A month after releasing new budget forecasts, the New Zealand government is tracking above them.

The government posted an operating deficit before gains and losses (obegal) of $3.025 billion in the five months ended November 30, which was $203 million better than the $3.228 billion deficit forecast in the half-year economic and fiscal update released on December 18.

The government is trying to get its books back in the black in the 2014/15 financial year after taking serious hits from the global financial crisis and Christchurch earthquakes. In the update just before Christmas, Treasury forecast an obegal surplus of just $66 million in the 2014/15 financial year, down from the $197 million buffer flagged in the May budget.

In the accounts for the five months to November 30 released today, core Crown spending was 0.1 percent above forecast at $28.8 billion, and core tax revenue of $22.5 billion was $127 million, or 0.6 percent, higher than forecast.

Net gains recorded by the New Zealand Superannuation Fund and Accident Compensation Corp, pushed the operating balance to a $706 million surplus, a $1.2 billion turnaround on the forecast deficit of $515 million.

Net debt of $56.4 billion was $317 million below forecast and is equal to 27.1 percent of gross domestic product.

The government's ambitious plan to return to surplus in the 2014/15 fiscal year hasn't convinced many, with the Reserve Bank, Fitch Ratings and a survey of financial institutions picking the books to stay in deficit for at least another year.

The Treasury is forecasting an obegal deficit of $9.2 billion in the 2011/12 year, falling to $7.3 billion and $2 billion in the following two years before turning into surpluses.

“It’s important that the government sticks to its programme of responsible fiscal management, so we can get back to surplus and start repaying debt,” Finance Minister Bill English said.

“At the same time, we will remain focused on building a more competitive and productive economy that encourages investment and supports jobs and higher incomes.

“That will be the focus of Budget 2013 later in the year,” English said.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Housing: Affordability Drops 14%, Driven By Auckland Prices

Housing affordability across New Zealand fell 14 percent in the year ending November 2014, with Auckland’s lack of affordability set to reach levels it hit during the height of the global financial crisis, according to the latest Massey University Home Affordability Report More>>

ALSO:

The Dry: Fonterra Drops Forecast Milk Volumes By 3.3 Percent

Fonterra Cooperative Group, the worlds largest dairy exporter, reduced its milk volume forecast for the 2014-2015 season by 3.3 per cent due to the impact of dry weather on production in recent weeks. More>>

ALSO:

Strike: Lyttelton Port Workers Vote To Escalate Dispute

Members of the Rail and Maritime Transport Union (RMTU) at Lyttelton Port today voted to escalate their industrial action. Around 200 RMTU members have been operating an overtime ban since 17 December and today they endorsed a series of full withdrawals of labour at the port. More>>

ALSO:

Scoop Business: NZ Dollar Falls To 3-Year Low As Investors Favour Greenback

The New Zealand dollar fell to its lowest in more than three years as investors sold euro and bought US dollars, weakening other currencies against the greenback. More>>

ALSO:

Scoop Business: NZ Govt Operating Deficit Smaller Than Expected

The New Zealand’s government’s operating deficit was smaller than expected in the first five months of the financial year as a clampdown on expenditure managed to offset a shortfall in the tax-take from last month’s forecast. More>>

ALSO:

0.8 Percent Annually:
NZ Inflation Falls Below RBNZ's Target

New Zealand's annual pace of inflation slowed to below the Reserve Bank's target band in the final three months of the year, giving governor Graeme Wheeler more room to keep the benchmark interest rate lower for longer.More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news